Kungsleden updates on yesterday´s tax rulings in the Administrative Court

        Print
| Source: Kungsleden AB
Kungsleden updates on yesterday´s tax rulings in the Administrative Court and
makes provision for previously received tax rulings from the Administrative
Court of Appeals.
Kungsleden updates on yesterday´s tax rulings in the Administrative Court
Yesterday Kungsleden received tax rulings from the Administrative Court
concerning tax cases in which the company is involved. The Administrative Court
ruled that two of Kungsleden´s Swedish group companies should be considered
being party to a transaction in 2006 which legally was made by two of
Kungsleden´s Dutch group companies.
The ruling means that the Administrative Court is of the opinion that the
capital gain resulting from the transaction should be subject to taxation in
Sweden.

Kungsleden has now analyzed the tax rulings and disagrees with the verdicts and
will appeal to the Administrative Court of Appeal. Kungsleden´s best judgement
is that the final outcome of these tax cases will be positive and therefore the
company will not make any provision at this time. Should the rulings be upheld,
the maximum negative effect on equity is estimated at SEK 1,360 m and the
maximum negative liquidity effect is calculated to be 1,325 m.

Kungsleden makes provisions for previously received tax rulings from the
Administrative Court of Appeals
As previously communicated, on April 1st Kungsleden received negative tax
rulings from the Administrative Court of Appeals. Kungsleden has now analyzed
the legal situation and has applied for leave to appeal at the Supreme
Administrative Court for the tax rulings in question. The court´s decision on
the leave of appeal is expected within the next few months.

Kungsleden has resolved to make a provision of SEK 1,640 m in the Q2 book
closing to cover the combined risk of loss in the cases in question. The reason
for making the provision is the company´s assessment is that the combined
probability of a definitive negative outcome is above 50 per cent. In general,
few applications for leave to appeal are granted by the Supreme Administrative
Court. If leave to appeal is rejected, the rulings received will take legal
effect.

The liquidity effect of a negative outcome is estimated to be SEK 1,475 m for
all of the cases in question. Kungsleden paid most of this claim in May and
expects to have to pay the remaining part in the next few months. The tax
payments are funded by utilizing part of the liquidity reserve Kungsleden has
for the tax risks consisting of cash and un-utilized credit facilities. This
liquidity reserve comprised SEK 2,940 m as of March 31st, 2014.

The provision will affect the net profit for the year, and it will also have an
effect on Kungsleden´s financial position and key ratios. As books have not yet
been closed for the second quarter, Kungsleden has decided to exhibit the
effects on the position as of March 31st on a pro forma basis.

Taking the provision into account, equity as per March 31st would decrease to
SEK 7,000 m on a pro forma basis, including the effects of property transactions
announced. Interest-bearing liabilities would increase to SEK 12,916 m,
indicating an equity ratio of 32.0 (37.3) per cent and a Loan to value ratio of
61.6 (57.2) per cent.
For more information, please contact:

Anders Kvist, Deputy CEO and CFO Kungsleden | phone +46 8 503 052 11 |
anders.kvist@kungsleden.se

www.kungsleden.se
Detta pressmeddelande finns tillgängligt på svenska på
www.kungsleden.se/pressmeddelanden

Kungsleden AB (publ) discloses the information in this press release according
to the Swedish Securities Markets Act and/or the Swedish Financial Trading Act.
The information was provided for public release on 11 June 2014 at 8:00 a.m.

Kungsleden’s business concept is to own, manage and improve commercial
properties in growth regions in Sweden and to deliver attractive total returns.
Kungsleden’s strategies to create value are based on meeting the premises
requirements of customers by managing, improving and developing properties and
planning consents and by optimising the company’s property portfolio. Kungsleden
has been quoted on NASDAQ OMX Stockholm since 1999.